9th Jun 2006 07:30
Signet Group PLC09 June 2006 Signet Group plc (LSE: SIG and NYSE: SIG) Embargoed until 7.30 a.m. BST 9 June 2006 Signet's first quarter profit before tax Up 10% Signet Group plc (LSE: SIG and NYSE: SIG), the world's largest speciality retailjeweller, today announced its first quarter results for the 13 weeks from 29January to 29 April 2006. Group Group profit before tax increased by 10.0% to £30.7 million (Q1 2005/06: £27.9million). The later timing of Mother's Day in the US is estimated to haveadversely impacted the result by over £1.5 million. Total sales were £419.6million (Q1 2005/06: £369.2 million), up by 13.7%. Like for like sales increasedby 2.8%. Total sales and like for like sales were both also affected by thetiming of Mother's Day. At constant exchange rates total sales increased by 7.2%and profit before tax increased by 1.7% (see note 8 for reconciliation). Theaverage US dollar rate was £1/$1.75 (Q1 2005/06: £1/$1.89). Operating profit at £32.2 million (Q1 2005/06: £29.5 million) increased by 9.2%.Operating margin was 7.7% (Q1 2005/06: 8.0%). The tax rate was 35.8% (Q1 2005/06: 34.4%). Earnings per share were unchanged at 1.1p. United States (circa 73% of Group annual sales) Operating profit at £35.8 million (Q1 2005/06: £31.4 million) was up by 14.0%and by 5.6% at constant exchange rates. Total sales increased by 18.1% to £328.3million (Q1 2005/06: £277.9 million) and by 9.4% at constant exchange rates.Like for like sales rose by 3.9%. After taking into account the impact of both achange in the timing of Mother's Day and foreign exchange translation movements,it is estimated that the underlying increase in operating profit was about 10%;while the increase in like for like sales after adjusting for the timingdifference is estimated to be over 7%. The operating margin was 10.9% (Q1 2005/06: 11.3%), having also been negativelyaffected by the timing of Mother's Day. As anticipated, the gross margin waslower due to mix changes and commodity cost increases; the former having againenhanced like for like sales growth. A range of management initiatives,including selective action on selling prices helped to minimise the pressure ongross margin. The bad debt ratio was lower than the first quarter of last year. United Kingdom (circa 27% of Group annual sales) The general retail environment remained challenging and divisional like for likesales showed a small decrease of 0.7% resulting in an operating loss of £(1.6)million (Q1 2005/06: £(0.4) million). Total sales at £91.3 million wereunchanged from the comparable period last year. As expected, gross margin waslower reflecting increased targeted promotional activity, a strong performanceby the insurance replacement business and higher commodity costs. H.Samuel'slike for like sales were down by 2.4% and those of Ernest Jones up by 1.3%. Bothdiamond participation in the sales mix and average selling price continued toincrease. Group Costs, Financing Costs and Net Debt Group costs were £2.0 million (Q1 2005/06: £1.5 million). Financing costs were£1.5 million (Q1 2005/06: £1.6 million). Net debt at 29 April 2006 was £93.1million (30 April 2005: £76.0 million). Comment Terry Burman, Group Chief Executive, commented: "Group profit before tax was 10%ahead of the first quarter of last year and like for like sales increased by2.8%. This was a good performance given the adverse impact of the timing changeof Mother's Day in the US and the continuation of demanding trading conditionsin the UK. The general retail environment in the UK remained challenging throughout thequarter and our like for like sales performance was broadly in line with thehigh street as a whole. While costs were tightly controlled, pressure on grossmargin adversely affected operating results. In the US, like for like sales were up by over 7% after adjusting for the changein timing of Mother's Day. The division again increased its share of the $59billion jewellery market." Enquiries: Terry Burman, Group Chief Executive +44 (0) 20 7317 9700 Walker Boyd, Group Finance Director +44 (0) 20 7317 9700 Mike Smith, Brunswick +44 (0) 20 7404 5959 Pamela Small, Brunswick +44 (0) 20 7404 5959 Signet operated 1,837 speciality retail jewellery stores at 29 April 2006; theseincluded 1,246 stores in the US, where the Group trades as "Kay Jewelers","Jared The Galleria Of Jewelry" and under a number of regional names. At thatdate Signet operated 591 stores in the UK, where the Group trades as "H.Samuel","Ernest Jones" and "Leslie Davis". Further information on Signet is available atwww.signetgroupplc.com. See also www.kay.com, www.jared.com, www.hsamuel.co.ukand www.ernestjones.co.uk. A conference call for all interested parties will take place today at 2.00 p.m.BST. European dial-in +44 (0) 20 7138 0835European replay until 13 June: +44 (0) 20 7806 1970 Access code: 8494713# US dial-in: +1 718 354 1172US replay until 13 June: +1 718 354 1112 Access code: 8494713# The Annual General Meeting will take place at 11.00 a.m. today. The secondquarter sales performance for the 13 weeks ending 29 July 2006 is expected to beannounced on Thursday 3 August 2006. This release includes statements which are forward-looking statements within themeaning of the Private Securities Litigation Reform Act of 1995. Thesestatements, based upon management's beliefs as well as on assumptions made byand data currently available to management, appear in a number of placesthroughout this release and include statements regarding, among other things,our results of operation, financial condition, liquidity, prospects, growth,strategies and the industry in which the Group operates. Our use of the words"expects," "intends," "anticipates," "estimates," "may," "forecast,""objective," "plan" or "target," and other similar expressions are intended toidentify forward-looking statements. These forward-looking statements are notguarantees of future performance and are subject to a number of risks anduncertainties, including but not limited to general economic conditions, themerchandising, pricing and inventory policies followed by the Group, thereputation of the Group, the level of competition in the jewellery sector, theprice and availability of diamonds, gold and other precious metals, seasonalityof the Group's business and financial market risk. For a discussion of these and other risks and uncertainties which could causeactual results to differ materially, see the "Risk and Other Factors" section ofthe Company's 2005/06 Annual Report on Form 20-F filed with the U.S. Securitiesand Exchange Commission on May 4, 2006 and other filings made by the Companywith the Commission. Actual results may differ materially from those anticipatedin such forward-looking statements even if experience or future changes make itclear that any projected results expressed or implied therein may not berealised. The Company undertakes no obligation to update or revise anyforward-looking statements to reflect subsequent events or circumstances. SIGNET GROUP plc Unaudited interim consolidated income statement for the 13 weeks ended 29 April 2006 13 weeks ended 13 weeks 52 weeks 29 April ended ended 2006 30 April 28 January 2005 2006--------------------------------------------------------------------------------- Notes £m £m £m--------------------------------------------------------------------------------- Sales 2,8 419.6 369.2 1,752.3 Cost of sales (381.3) (333.0) (1,516.3)---------------------------------------------------------------------------------Gross profit 38.3 36.2 236.0Administrative expenses (19.3) (18.4) (74.1)Other operating income 13.2 11.7 46.3---------------------------------------------------------------------------------Operating profit 2,8 32.2 29.5 208.2Net financing costs 3 (1.5) (1.6) (7.8)---------------------------------------------------------------------------------Profit before tax 8 30.7 27.9 200.4Taxation 4 (11.0) (9.6) (69.6)---------------------------------------------------------------------------------Profit for the financial period 19.7 18.3 130.8---------------------------------------------------------------------------------Earnings per share - basic 6 1.1p 1.1p 7.5p - diluted 1.1p 1.1p 7.5p--------------------------------------------------------------------------------- All of the above relates to continuing activities. Unaudited consolidated balance sheetat 29 April 2006 29 April 30 April 28 January 2006 2005 2006-------------------------------------------------------------------------------- Note £m £m £m-------------------------------------------------------------------------------- AssetsNon-current assetsIntangible assets 22.7 17.1 22.9Property, plant and equipment 250.9 227.5 253.8Other receivables 15.6 12.8 14.3Deferred tax assets 17.1 12.4 17.4-------------------------------------------------------------------------------- 306.3 269.8 308.4--------------------------------------------------------------------------------Current assetsInventories 681.5 601.9 679.7Trade and other receivables 380.6 329.1 430.4Cash and cash equivalents 77.1 80.9 52.5-------------------------------------------------------------------------------- 1,139.2 1,011.9 1,162.6-------------------------------------------------------------------------------- Total assets 1,445.5 1,281.7 1,471.0-------------------------------------------------------------------------------- LiabilitiesCurrent liabilitiesShort-term borrowings (170.2) (25.4) (151.1)Trade and other payables (179.9) (170.6) (217.1)Deferred income (55.6) (48.4) (50.4)Current tax (31.4) (29.0) (50.2)-------------------------------------------------------------------------------- (437.1) (273.4) (468.8)--------------------------------------------------------------------------------Non-current liabilitiesBank loans - (131.4) -Trade and other payables (36.8) (28.3) (36.0)Deferred income (66.0) (58.3) (65.6)Provisions (5.9) (5.7) (6.2)Retirement benefit obligation (15.5) (1.9) (15.5)-------------------------------------------------------------------------------- (124.2) (225.6) (123.3)-------------------------------------------------------------------------------- Total liabilities (561.3) (499.0) (592.1)--------------------------------------------------------------------------------Net assets 884.2 782.7 878.9-------------------------------------------------------------------------------- EquityCapital and reserves attributable toequity shareholdersCalled up share capital 8.7 8.7 8.7Share premium 72.9 68.3 71.7Other reserves 138.2 139.3 138.2Retained earnings 664.4 566.4 660.3--------------------------------------------------------------------------------Total equity 7 884.2 782.7 878.9-------------------------------------------------------------------------------- Unaudited consolidated statement of recognised income and expensefor the 13 weeks ended 29 April 2006 13 weeks 13 weeks 52 weeks ended ended ended 29 April 30 April 28 January 2006 2005 2006------------------------------------------------------------------------------- £m £m £m------------------------------------------------------------------------------- Profit for the financial period 19.7 18.3 130.8Translation differences (16.8) (8.8) 33.1Effective portion of changes in valueof cash flow hedges net of recycling 0.1 (1.7) 1.4Actuarial loss on retirement benefitscheme - - (11.4)-------------------------------------------------------------------------------Total recognised income and expensefor the period 3.0 7.8 153.9------------------------------------------------------------------------------- Unaudited consolidated cash flow statementfor the 13 weeks ended 29 April 2006 13 weeks 13 weeks 52 weeks ended ended ended 29 April 30 April 2 8 January 2006 2005 2006------------------------------------------------------------------------------- £m £m £m-------------------------------------------------------------------------------Cash flows from operating activities: Profit before tax 30.7 27.9 200.4Depreciation and amortisation charges 12.7 10.1 46.2Financing costs 1.5 1.6 7.8Increase in inventories (16.4) (28.7) (72.8)Decrease/(increase) in trade and otherreceivables 37.0 24.6 (51.4)(Decrease)/increase in payables anddeferred income (20.2) 8.4 53.0Other non-cash movements 0.8 (0.1) 4.9-------------------------------------------------------------------------------Cash generated from operations 46.1 43.8 188.1Interest paid (2.7) (2.6) (11.4)Taxation paid (28.8) (23.1) (64.7)-------------------------------------------------------------------------------Net cash from operating activities 14.6 18.1 112.0------------------------------------------------------------------------------- Investing activities:Interest received 1.0 1.0 2.4Proceeds from sale of property, plantand equipment - - 7.5Purchase of plant and equipment (14.2) (13.8) (70.4)Purchase of intangible assets (0.7) - (5.5)-------------------------------------------------------------------------------Cash flows from investing activities (13.9) (12.8) (66.0)------------------------------------------------------------------------------- Financing activities:Proceeds from issue of share capital 1.2 0.3 3.9Purchase of own shares - - (2.0)Increase in/(repayment of) borrowings 23.2 (2.3) (46.6)Dividends paid - - (52.7)-------------------------------------------------------------------------------Cash flows from financing activities 24.4 (2.0) (97.4)------------------------------------------------------------------------------- Reconciliation of movement in cash and cashequivalents:Net increase/(decrease) in cash and cash equivalents 25.1 3.3 (51.4)Opening cash and cash equivalents 52.5 59.6 102.4Translation difference (0.5) 0.4 1.5--------------------------------------------------------------------------------Closing cash and cash equivalents 77.1 63.3 52.5-------------------------------------------------------------------------------- Reconciliation of cash flows to movement in net debt:(1)Change in net debt resulting from cash flows 1.9 5.6 (4.8)Translation difference 3.6 1.9 (10.3)--------------------------------------------------------------------------------Movement in net debt in the period 5.5 7.5 (15.1)Opening net debt (98.6) (83.5) (83.5)--------------------------------------------------------------------------------Closing net debt (93.1) (76.0) (98.6)-------------------------------------------------------------------------------- (1) Net debt represents cash and cash equivalents, short-term borrowings and bank loans. Notes to the unaudited interim financial resultsfor the 13 weeks ended 29 April 2006 1. Basis of preparation These interim financial statements have been prepared on the basis ofInternational Accounting Standards and International Financial ReportingStandards (collectively "IFRS"). IFRS is subject to review and possibleamendment or interpretive guidance and therefore subject to change. Details ofthe accounting policies applied are set out in the Group's Annual Report andAccounts for the year ended 28 January 2006. These interim financial statements are unaudited and do not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Thecomparative figures for the 52 weeks ended 28 January 2006 are not the Company'sstatutory accounts for that period. Those accounts have been reported on by theCompany's auditors and will be delivered to the Registrar of Companies followingthe Company's Annual General Meeting. The report of the auditors was unqualifiedand did not contain a statement under Section 237(2) or Section 237(3) of theCompanies Act 1985. 2. Segment information 13 weeks 13 weeks 52 weeks ended ended ended 29 April 30 April 28 January 2006 2005 2006-------------------------------------------------------------------------------- £m £m £m-------------------------------------------------------------------------------- Sales by origin and destinationUK, Channel Islands & Republic ofIreland 91.3 91.3 469.6US 328.3 277.9 1,282.7-------------------------------------------------------------------------------- 419.6 369.2 1,752.3-------------------------------------------------------------------------------- Operating profit/(loss)UK, Channel Islands & Republic of Ireland- Trading (1.6) (0.4) 49.1- Group central costs (2.0) (1.5) (8.0)-------------------------------------------------------------------------------- (3.6) (1.9) 41.1US 35.8 31.4 167.1-------------------------------------------------------------------------------- 32.2 29.5 208.2-------------------------------------------------------------------------------- The Group's results derive from one business segment - the retailing ofjewellery, watches and gifts. 3. Net financing costs 13 weeks 13 weeks 52 weeks ended ended ended 29 April 30 April 28 January 2006 2005 2006------------------------------------------------------------------------------- £m £m £m-------------------------------------------------------------------------------Interest payable and similar charges (2.7) (2.6) (11.4)Pensions financing credit 0.2 - 1.2Interest receivable 1.0 1.0 2.4------------------------------------------------------------------------------- (1.5) (1.6) (7.8)------------------------------------------------------------------------------- 4. Taxation The net taxation charge in the income statement for the 13 weeks to 29 April2006 has been based on the anticipated effective taxation rate for the 53 weeksending 3 February 2007. Notes to the unaudited interim financial resultsfor the 13 weeks ended 29 April 2006 5. Translation differences The exchange rates used for the translation of US dollar transactions andbalances in these interim statements are as follows: 29 April 30 April 28 January 2006 2005 2006-------------------------------------------------------------------------------- Income statement (average rate) 1.75 1.89 1.80Balance sheet (closing rate) 1.82 1.91 1.77-------------------------------------------------------------------------------- The effect of restating the balance sheet at 30 April 2005 to the exchange ratesruling at 29 April 2006 would be to increase net debt by £4.7 million to £80.7million. Restating the income statement would increase the pre-tax profit forthe 13 weeks ended 30 April 2005 by £2.3 million to £30.2 million. 6. Earnings per share 13 weeks 13 weeks 52 weeks ended ended ended 29 April 30 April 28 January 2006 2005 2006------------------------------------------------------------------------------- £m £m £m------------------------------------------------------------------------------- Profit attributable to shareholders 19.7 18.3 130.8------------------------------------------------------------------------------- Weighted average number of shares inissue (million) 1,739.3 1,735.9 1,736.6Dilutive effect of share options(million) 3.1 6.4 3.3-------------------------------------------------------------------------------Diluted weighted average number ofshares (million) 1,742.4 1,742.3 1,739.9-------------------------------------------------------------------------------Earnings per share - basic 1.1p 1.1p 7.5p- diluted 1.1p 1.1p 7.5p------------------------------------------------------------------------------- The number of shares in issue at 29 April 2006 was 1,740,151,929 (30 April 2005:1,736,181,823 shares, 28 January 2006: 1,738,843,382 shares). 7. Changes in total equity 13 weeks ended 29 April 2006 Share Share Revaluation Special Purchase of own Retained Total Captial premium reserve reserves shares earnings ------------------------------------------------------------------------------------------------------ £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------ Balance at 28January 2006 8.7 71.7 4.3 142.2 (8.3) 660.3 878.9Recognised incomeand expense:- Profit for the financial period - - - - - 19.7 19.7- Effective portion of changes in value of cash flow hedges net of recycling - - - - - 0.1 0.1- Translation differences - - - - - (16.8) (16.8)Equity-settledtransactions - - - - - 1.1 1.1Share optionsexercised - 1.2 - - - - 1.2------------------------------------------------------------------------------------------------------Balance at 29April 2006 8.7 72.9 4.3 142.2 (8.3) 664.4 884.2------------------------------------------------------------------------------------------------------ Notes to the unaudited interim financial resultsfor the 13 weeks ended 29 April 2006 8. Impact of constant exchange rates The Group has historically used constant exchange rates to compareperiod-to-period changes in certain financial data. This is referred to as 'atconstant exchange rates' throughout this release. The Group considers this auseful measure for analysing and explaining changes and trends in the Group'sresults. The impact of the re-calculation of sales, operating profit, profitbefore tax and net debt at constant exchange rates, including a reconciliationto the Group's GAAP results, is analysed below. 13 weeks ended 29 13 weeks 13 weeks ended Growth at Impact of At constant Growth atApril 2006 ended actual exchange exchange rate exchange rates constant movement exchange 29 April 30 April rates (non-GAAP) rates 2006 2005 (non-GAAP)------------------------------------------------------------------------------------------------------ £m £m % £m £m %------------------------------------------------------------------------------------------------------Sales by origin anddestinationUK, ChannelIslands &Republic ofIreland 91.3 91.3 - - 91.3 -US 328.3 277.9 18.1 22.2 300.1 9.4----------------------------------------------------------------------------------------------------- 419.6 369.2 13.7 22.2 391.4 7.2-----------------------------------------------------------------------------------------------------Operating profit/(loss)UK, Channel Islands& Republic ofIreland - Trading (1.6) (0.4) n/a - (0.4) n/a - Group central costs (2.0) (1.5) n/a - (1.5) n/a---------------------------------------------------------------------------------------------------- (3.6) (1.9) n/a - (1.9) n/aUS 35.8 31.4 14.0 2.5 33.9 5.6---------------------------------------------------------------------------------------------------- 32.2 29.5 9.2 2.5 32.0 0.6---------------------------------------------------------------------------------------------------- Profit beforetax 30.7 27.9 10.0 2.3 30.2 1.7---------------------------------------------------------------------------------------------------- At 29 April 2006 29 April 30 April Impact of At constant 2006 2005 exchange rate exchange rates movement (non-GAAP)-------------------------------------------------------------------------------- £m £m £m £m--------------------------------------------------------------------------------Net debt (93.1) (76.0) (4.7) (80.7)-------------------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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